PRC lawyer guide
A China NNN is a contract used before sensitive manufacturing information is disclosed. It restricts non-disclosure, non-use and non-circumvention—but its value depends on the right Chinese entity, specific protected information and an enforcement design that fits the transaction.
Do not reveal protected information.
Do not use it for self or others.
Do not bypass protected relationships.
NNN means non-disclosure, non-use and non-circumvention. Non-disclosure restricts sharing your protected information. Non-use restricts the recipient from using it for its own production or another customer. Non-circumvention restricts the recipient from bypassing you to deal directly with customers, channels or other protected relationships identified in the agreement.
An ordinary NDA is usually centred on secrecy. A China-focused NNN also addresses the supplier using the product information without disclosing it and bypassing the buyer. The document must still be tailored to the transaction: calling a document “NNN” does not by itself make it enforceable.
The agreement should name the exact Chinese legal entity that will receive the protected information or control production. Use its official Chinese name, not only an English trade name. If a trading company, factory, affiliate or subcontractor will separately receive the information, the agreement must address the relevant entity chain instead of assuming one signature binds unnamed companies.
A usable agreement matches the correct counterparty and protected information, defines prohibited use and circumvention in concrete terms, selects governing law and a dispute forum with enforcement in mind, and provides an operative Chinese text. It should also fit the buyer’s actual leverage: an unsigned document protects nothing.
PRC Civil Code Article 585 permits agreed liquidated damages, but a court or arbitral tribunal may reduce an amount that is excessively higher than the loss at a party’s request. The Supreme People’s Court says an amount more than 30% above the loss may generally be regarded as excessive, while also requiring consideration of the transaction, performance, fault, background, fairness and good faith. The 30% figure is therefore an adjustment benchmark—not a universal cap and not a substitute for explaining the commercial basis of the amount.
Sign before each relevant Chinese entity receives non-public designs, drawings, samples, specifications, tooling information, pricing, customer lists or channel information. If disclosure has already begun, document what was sent, when, to whom and under what confidentiality measures before deciding the next step.
No. China trademark, patent or copyright strategy protects registered or recognised rights. A manufacturing or supply agreement covers quality, inspection, delivery, payment, overruns, rejected goods, tooling and remedies. An NNN addresses pre-production disclosure and misuse risk; these tools can work together but do different jobs.
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